Honda has been touting its second generation Insight as a worthy competitor to the Toyota Prius. In the real world, however, sales aren't quite backing up those statements. The Insight is indeed a worthy competitor to the second generation Prius, but Honda is quickly finding out that it doesn't quite have the firepower to go up against the new third-generation Prius -- at least in the U.S. market.

According to the Los Angeles Times, Honda sold just 2,079 Insights during the month of June in the U.S. while Toyota was able to move a whopping 12,998 Prius hybrids. Since the Insight's introduction in March of this year, Honda has sold a total of 7,524 vehicles -- Toyota, however, has managed to move over 40,000 of its “green” icon. Honda is not expected to meet its sales goal of 90,000 Insights for 2009.

"We're all pretty disappointed. We thought we had the next hit on our hands," said Don Marino, Honda of Santa Monica's General Manager.

"Honda just hasn't had a cogent hybrid strategy at all," added Eric Noble, president of research firm Car Lab.

Honda's Insight does have a few characteristics which can win over consumers. It has a lower price tag than the Prius and more nimble handling. However, the Prius offers better fuel economy (50 mpg combined for the Prius versus 41 mpg combined for the Insight), is larger (the Prius is rated as a midsize vehicle, the Insight is a compact), is faster in acceleration runs, and offers more technology/options to pamper its driver and passengers.

Things are expected to get even worse for Honda when Toyota introduces its "stripper" Prius later this year. The current base Prius has an MSRP of $22,000 compared to $19,800 for the Insight. However, the price of entry for the Prius will drop to $21,000 with the new model in September making the price delta even smaller.

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